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Old Saturday, December 30th, 2006, 10:49 PM
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Default Costa Linda Not Presenting All Points of View

Costa Linda posted a letter from the Chairman yesterday as follows:

THE CHAIRMAN'S LETTER
December 27, 2006
Dear Fellow Owners,
We are writing this letter to keep you informed of developments with your timeshare. Recently, we have raised the annual maintenance by 20%. We did not expect the increase to be greeted with cheers, but we knew that most members would be reassured by the fact that this was the first increase in over six years (excluding modest upward adjustments to the three-bedroom units). Regrettably, one dissenting board member, Mr. Cyrus Holley, has been contacting some owners by phone and also using surrogates to contact most owners by email, spreading misleading and false allegations against the board members who voted in favor of the maintenance increase. He is also apparently behind a petition seeking the removal of five board members – only those who disagreed with him. Mr. Holley’s inappropriate communications have caused many owners to ask questions. In the last few weeks we have received a number of questions. Below are the answers to those questions. We hope this communication resolves the confusion created by Mr. Holley’s misguided efforts.
Why did the board act so late with the maintenance increase?
At the February 2006 meeting, the board was made aware that the budget was in a deficit by $250,000, primarily due to fewer-than-expected resale of units that were owned by the timeshare organization. The expectation at the time was that this was a seasonal issue that would reverse course, in part, with additional advertising of units in South America.
At the May 2006 meeting the deficit had increased to $500,000 and the finance committee’s conclusion was that it was necessary to immediately initiate an energy surcharge due to the sharply increasing energy costs on the island. The board approved the energy surcharge unanimously. Several board members voiced their opinion that a maintenance increase would be necessary because the energy surcharge would resolve less than half of the deficit. Mr. Holley, then acting as our chairman, would not allow a discussion of this matter.
The next day, there was the annual meeting of the timeshare. At this meeting, Mr. Holley declared that we were financially strong and that all was well at Costa Linda, completely avoiding mention of the large deficit. Furthermore, he did not even announce the energy surcharge that had been approved the day earlier. Mr. Holley did not keep the members informed of the full and complete facts. This was the very day the Mr. Holley resigned as chairman of the board, though still retaining a seat on the board as a regular member.
In October 2006, the board met for the first time under the leadership of its new Chairman, Judge David Schepps. At this meeting the projected annual budget deficit for fiscal 2006 had now grown to $750,000-$800,000 (for reasons fully discussed in the November Maintenance letter). At this meeting the board felt it would be irresponsible to do anything other than increase the maintenance to ensure that we did not deplete our reserves any further. Because of this action, the finances of our timeshare remain strong. We anticipate no deficit in fiscal 2007, and our projections no longer including material revenue from sale of units.
Why is there dissension between Mr. Holley and the majority of the board?
Since the board’s approval of the maintenance increase in October 2006, there have been a couple of unexpected developments. Three board members – Mr. Cyrus Holley, Mr. Gale Measel and Mrs. Susan de Roos - called a special meeting with the intention of rescinding the maintenance increase. These three voted for rescission, while the majority voted for the maintenance increase to remain in force. The majority welcomed any suggestions of how the deficit could be closed but no one had any sensible suggestions that would close the gap.
The majority of the board was unwilling to consider slashing spending on standard maintenance, repairs, or amenities. Furthermore, any further delay in adjusting the maintenance would result in an unwise reduction in cash reserves – and would end up resulting in the need for the future increase in maintenance to be that much higher.
Two of the dissenting board members – Mr. Holley and Mrs. De Roos – had been unable to attend the October meeting where the maintenance increase was first voted on. The other member, Mr. Gale Measel, is on record of voting for the original increase but we are careful to mention, that he now denies voting in favor of it.
In order to fully understand the personal dynamics of the board’s operation we have to explain a topic we would have rather avoid: The imperial chairmanship of Mr. Cyrus Holley. Mr. Holley had been chairman for over six years. He did many helpful things for our timeshare, though his time as chairman was one where most opinions contrary to his own were not generally welcomed. He would often not let other board members freely and openly debate ideas and options, often telling them to “Shush!” or “Shut Up!” and quickly moving to a different topic.
Why did the board not increase the maintenance at a slow and even pace over the years?
With the exclusion of small increases of the three-bedroom units, the timeshare had been able to get by without increasing the maintenance for some time by eliminating wasteful practices that were originally put in place by Sun Development. Furthermore, we benefited from the resale of timeshare units that we had acquired years earlier from Sun Development and foreclosures. But the most marketable units were mostly used up by 2005.
Why are these remaining units so hard to sell? Can’t we just lower the price?
We now have approximately 160 units left to sell but these units are mostly those in the slowest time of year. Before we choose to sell them at sharply reduced prices, we have been marketing them in different foreign markets. If such marketing does not bear fruit during 2007, we will probably have to steeply discount the pricing to sell them.
How much more revenue will we get from these unit sales?
For many years, we had received around $600,000 per year from these units. We expect to generate a total of approximately $700,000 to $1,000,000 more from this source.
Why was the fiscal 2006 budget so far off the mark?
As we explained, the timeshare was able to generate about $600,000 per year from sales of units it owned. These sales represented a form of revenue that would eventually be used up. When expenses were running a bit higher than expected, the management would just market the units that much harder. But, sales of such units fell to just around $100,000 in fiscal 2006, as the last units remaining proved too hard to sell at prices near historical levels. Had we chosen to sell that at sharply discounted pricing we might have been able to meet the 2006 budget, but then we would have essentially squandered a valuable asset. And then we would still have to raise the maintenance to make up for the absence of future unit sales.
Did the fiscal 2006 deficit hurt our financial strength? Is our investment at risk?
The finances of the timeshare remain strong! With the deficit of approximately $700,000 occurred in fiscal 2006, we still have reserves to $2.3 million. Our reserves are in cash and they are satisfactory to meet emergency needs (e.g., an untimely major repair). The reason the majority of the board deemed it necessary to increase the maintenance was that without the adjustment, the reserves would decline to levels where we would be unsatisfactorily prepared for an emergency. For instance, our air conditioning system is 14 years old but has a listed lifespan of only around 10-12 years. Replacement of this system would likely cost almost $2 million. Had the board gone along with the three directors who voted for the recession of the increase in maintenance, your timeshare’s cash reserves would have been reduced to a precarious level.
Why should we trust the majority of the board, rather than Mr. Holley?
When there was a discussion of the maintenance increase at the November Special Meeting, Mr. Holley vehemently complained about what this increase was going to cost him personally. He appeared more concerned about the fee increase on his ownership of approximately 60 units than the welfare of the entirety of the timeshare. Other board members use most of their weeks and deem consistent quality in our facilities more important rather than risk seeing our beloved Costa Linda fall into disrepair as many other timeshares have let happen.
From the outset of this ordeal with Mr. Holley, his former friends and colleagues on the Board attempted to recall his record of success as Chairman and to not openly criticize his actions. However, Mr. Holley has extended his vendetta beyond the confines of the Board meetings and he leaves us with no alternative than responding in kind. Many of us other than his two cohorts have questioned the reasons behind his opposition to an increase in fees. Although he is obviously financially affected as the owner of approximately 60 weeks, we have concluded that it is only a matter of pride and ego that dictates his actions. Now we recall the examples of his ego. He has routinely referred to himself in letters to you as "Doctor Cyrus Holley" and this was accepted although it was known that it was from an honorary doctorate from BloomfieldCollege where. Mr. Holley had been a generous donor over the years and was on its board of trustees. However, many members read more into this reference and it is for this reason, that we must dispel any authority that anyone would read into such a title. It is regrettable to reduce the debate to this level but it is Mr. Holley's actions that have caused it. The fact regarding his honorary doctorate is available on the website http://campus.bloomfield.edu/academic/holley.asp
The reason that we bring all these facts up is that an “anonymous” petition has been circulating seeking to replace only those members that voted for the increase. Somehow, the logic of seeking to remove only those board members who voted for the increase is that only they were responsible for deficit, while those who voted against are innocent of everything.
We have information suggesting that this petition is linked to Mr. Holley. As such, we are to conclude the only real wrong committed by the majority of the board was to defy Mr. Holley’s edict. In the past, Mr. Holley would frequently not even allow discussion of any increase in the maintenance. Indeed, on November 13, 2006, Mr. Holley wrote to Judge David Schepps and the entire board a long irate email. Here are a few select quotes showing Mr. Holley’s intolerance to not getting his own way:
- “Knowing me as you do, you had to be certain that I would oppose any increase in maintenance fees...”
- “You have embarrassed and disgraced me.”
- “I trusted you and always had but you betrayed me and I don’t know why.”

Simply stated, Mr. Holley was “betrayed” because he did not get his own way for the first time. He viewed the any action that he disagreed with as a betrayal.
But what about the two other board members that voted with Mr. Holley to rescind the increase in maintenance?
With regards to the two other dissenting members of the board, Mr. Gale Measel and Mrs. Susan de Roos, they have long been aligned with Mr. Holley. Past actions by these two board members contradict their recent votes to rescind the maintenance increase. For instance, in 2005, Mrs. de Roos suggested a special assessment to the maintenance of $50. And in 2006, at the very meeting where the maintenance was increased, Mr. Measel suggested a special assessment of $450.
Thus, we are only able to conclude that their rescission vote has more to do with their personal relationship with Mr. Holley than with their responsibility as your board members. We have no information that either Mr. Measel or Mrs. de Roos are an active part of the attempt to overthrow the majority of the board.
Is the board dysfunctional? Can it effectively operate?
The board should be able to operate effectively even with Mr. Holley’s diversions, though his efforts to overthrow the majority of board do provide a bit of a distraction. For instance, his calling of a special board meeting cost many thousands of dollars because of the airline and accommodation expenses for board members in Aruba. (Many people are under the misconception that accommodations don’t cost anything. This is incorrect. Units that board members occupy during such meetings must be rented from owners like you. Thus, owners of the units receive rent, which are part of the timeshare’s operating expenses.)
That being said, given that Mr. Holley is no longer chairman and does not control the agenda, we view many of his recent unfortunate actions as that of a sore loser. Mr. Holley’s term as board member ends during fiscal 2007. We do not expect him to be on the board thereafter and as such his ability to distract the board will be minimal.
The new chairman, Judge David Schepps, has been in control since the October 2006 meeting. He operates the board in an open manner, allowing other members to voice opinions and consider suggestion. In the future, a summary of each meeting of the board will be summarized on the Costa Linda website so that there will be more transparency. Furthermore, the board will post answers to frequently asked questions on the website.
How much will the maintenance go up next year?
Despite continued efforts to improve cost efficiencies and boost vendor revenue, it would be unrealistic to hope for another multi-year period of no increases in the maintenance. Our expectation is that over the long-term our maintenance fees will be increased at roughly the same pace as the inflation rate in Aruba.
In conclusion, we hope this discussion has clarified the reasons and timing of the maintenance increase, as well as addressing the timeshare's financial strength and prospects. We will continue to keep all owners fully informed. If you have any comments or concerns for the board please email us at execadmin@costalinda-aruba.com.
Chairman of the Board
Judge David D. Schepps
Co-Chairmen of the Finance Committee
Keith A. Walker
Stephen M. Berger


This letter contains many inaccuracies (I'm giving him the benefit of the doubt that he wasn't lying outright to us), libelous information, slanders people, and is based on the chairman's suppositions and opinions, not facts. I was very upset yesterday, and submitted the following post on the Costa Linda Bulletin Board as a response:

Response to the Chairman’s letter dated 12/27/06

As an owner of 5 weeks at Costa Linda I find your attack against Mr. Holley, Mrs. deRoos, and Mr. Measel appalling. It is unprofessional and unwarranted, and you owe all of them an apology. You choose to censor us – how about censoring yourself and removing this letter from the web site immediately?

You have chosen to put your suppositions down as fact, but you don’t give any evidence to back it up. Unless you can supply us with cold, hard facts, this libelous letter needs to be removed immediately.

I was at Costa Linda when the special meeting was held. I was told by a board member (and it wasn’t Mr. Holley) that the request was not to rescind the additional maintenance fee as you have stated, but rather was a request to put it on hold until it could be fully investigated and reported on to the membership. If it was warranted, it would be reinstated. But, if there were other options, such as holding off until the next fiscal year, or to lower the amount, that would be considered. In other words, they wanted to do their homework and know the facts inside and out so they could properly present the information to the membership – something that should have been done from the beginning.

As the Chairman, you should have stayed and addressed the membership at the manager’s meeting the next day, but you elected to leave. Instead you left Mr. Walker and Mr. Berger to answer questions, which was a joke since they weren’t able to answer the questions posed. The situation turned ugly, and they called one of their fellow board members a liar, and the following comment was also heard from Mr. Walker: “I’m retired and don’t need this aggravation”. The only time there was silence was when Mr. Holley spoke, and he was the only person at that meeting that had the respect of the members.

I can also vouch for the fact that the proposition/resolution was started after Mr. Holley left Costa Linda. We, the members, had enough and gathered together and started it. Two of the members took charge, and did an excellent job drafting it. It was then circulated and most members we talked to were eager to sign it. Mr. Holley, Mrs. deRoos, and Mr. Measel had nothing to do with it. Since I was there and you weren’t, I know what happened.

The signed proposition/resolution was brought to the Manager’s meeting on December 5. Every week since then additional signatures for the proposition/resolution were presented. The silence has been deafening until your letter posted today, and Joy’s short acknowledgement posted yesterday.

You keep referring to what did/didn’t happen at the board meetings, but how would the members ever know since you’ve chosen not to post minutes from those meetings? Also, why were Mr. Holley and Mrs. deRoos denied the right to participate in the October board meeting by teleconference since they couldn’t attend in person? According to our by-laws that was their right, and you denied it.

You stated that Mr. Measel is on record for voting for the additional maintenance fee. What record since there aren’t any minutes from that board meeting? I know Mr. Measel, and he is truthful and honorable. If he said he didn’t vote for it, I believe him and not your fictitious “record”. I also know that had he voted for the increase, he would have signed the notice that accompanied the invoice.

As for selling the unsold units, part of the problem is the Marketing, or lack there of. The only Marketing I saw was image ads, and we don’t need image ads, we need sales ads. Part of your problem would be solved immediately if you actually had a Marketing campaign that was directed to sales.

Rather than your slanderous account of Mr. Holley’s actions, the majority of members respect him and appreciate all he’s done for Costa Linda. He RESCUED us from Sun Development, and he got us out from under them with the least amount of damage. We were the only resort to weather the storm without a special assessment. He’s also kept the resort running very well and managed to hold maintenance fees flat for many years, all due to his effective leadership. You seem to have conveniently forgotten all he’s done for Costa Linda, but I can assure you that the members haven’t.

I find it disturbing that under your watch we’ve had a huge increase in maintenance fees and we’ve had unnecessary work done, such as replacing the door locks. During the 2+ weeks I was at Costa Linda, there were more problems with the new door locks than we ever had with the old door locks. It was a waste of money, and I see the need for more expenses down the road when we have to replace this system that isn’t working.

Mr. Chairman, I suggest you take a good hard look at all the owners who have signed the proposition/resolution. This is not some small, insignificantproblem that is going to go away. Our numbers grow daily, and you have just added fuel to the fire with this letter.




Management at Costa Linda has decided not to "approve" my post and show it on the Bulletin Board. I know this since a post from Alan Carlin has been added today, and his post was made a day after I submitted my post. I am upset that they won't allow the owners to present all points of view on our Bulletin Board. I've just submitted the following post to the Costa Linda Bulletin Board to express my unhappiness, but I fear it also won't be approved and shown:


Why Aren't You Allowing Owners to Post All Points of View?

I posted a response to the Chairman’s letter yesterday, but it isn’t being shown. Why not?

Yet, you’ve chosen to post Alan Carlin’s post which contains incorrect information and slanders some owners. Why?

Per the information listed on the Members Bulletin Board page: Slander, profanity, libel or insults will not be permitted on the CLBR website or it's Forums. However, you quickly posted Mr. Carlin’s message even though it slanders other owners.

If you want to present all points of views, then present all points of views. However, censoring owners who don’t share your point of view, and breaking your posted rules to push your point of view, is a blatant abuse of your authority.

I am sure you’ll never post this message either as it doesn’t present the party line. However, you are doing a huge disservice to the owners.

The voice of the few can't control the voice of the majority. Even if they presently control our Bulletin Board, our voice will be heard. Visit Aruba has been great about letting all points of view be shown.

We need to take back control of our resort now. If there are any Costa Linda owners that read this and don't have a copy of the voting/proxy information, send me a PM, and I'll make sure you get it.
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